Electric cars used to be the “cheap to run” option. No road tax, no fuel duty, and lower servicing costs. That landscape is changing, and the latest government plans make that crystal clear. From 2025 and again in 2028, owners of electric and plug-in hybrid cars will start paying two new forms of motoring tax: road tax (VED) and a new mileage-based EV charge.

For people moving home or investing in property, this matters more than you might think. Cars influence commuting costs, charging habits, energy usage, and even what type of buyer your home attracts.

Here’s what’s changing — and why it matters in the housing market.

Road Tax Returns for Electric Cars (From April 2025)

Electric cars will no longer be exempt. From April 2025:

Most EVs will pay the standard VED rate, currently £180 per year. EVs originally costing over £40,000 will also pay the expensive car supplement, adding another £390 per year for five years.

This puts EVs broadly in line with petrol and diesel vehicles and removes the long-standing incentive of “zero road tax”.

For buyers, especially those comparing running costs between areas, this is an extra line in the budget.

Mileage-Based EV Tax (From April 2028)

The November 2025 Budget introduces a second layer: an annual charge based on how many miles you drive.

The government plans to apply a per-mile rate of around half the fuel duty equivalent. For most drivers, this is expected to be in the region of 4–5p per mile.

High-mileage EV owners will feel this most. A typical 10,000-mile-a-year driver could see an additional £400–£500 added to their annual running costs.

Crucially:

EV owners will pay both VED and the mileage charge from 2028.

Why This Matters for Buyers and Sellers

Running costs affect affordability

Mortgage rates, energy prices and general living costs already influence buyer behaviour. With the cost of running an EV rising, households will be more conscious about where they live and how far they commute.

Homes within walking distance of schools, shops or major transport links may become even more appealing.

Charging matters more than ever

If running costs rise, buyers will want convenience.

Properties with:

off-street parking dedicated EV chargers solar panels feeding the charger battery storage

will continue to attract a premium. Convenience and low-cost home charging will be more valuable than the old “free road tax” attraction.

Buyers may ask different questions

Instead of “Is there a charger?”, expect more buyers to ask:

“What’s the electricity tariff like here?” “How much will it cost to charge overnight?” “Is there a place to charge if the drive is occupied?”

These features will increasingly influence offers.

Why It Matters for Landlords

Tenants with EVs will expect charging provision

Rental demand is shifting. More tenants drive EVs every year, and from 2028, with mileage charges coming in, home charging becomes even more important because it keeps running costs low.

Homes without off-street parking risk falling behind.

Smart charging adds value

Landlords who install:

wall-box chargers solar panels battery storage tariff-optimised smart charging

will attract higher-quality tenants and reduce voids.

Opportunity for higher rents

Properties offering low running costs often command better rent. As more motoring expenses creep back in, tenants will value anything that cuts their monthly bills — especially home charging.

Impact on the Wider Housing Market

The new tax system won’t transform the market overnight, but it will subtly shift priorities:

Urban homes become stronger for low-mileage households. Rural and commuter-belt homes may factor in higher motoring costs. Properties with drives and garages will gain even more importance. Buyers are less likely to pay a premium for an EV unless the home supports low-cost charging.

The core message?

Convenience and running-cost efficiency will drive buyer decisions more than the type of car they own.

Final Thoughts

Electric vehicles are still cheaper to run than petrol or diesel cars, but the gap is narrowing. As these taxes come in, the way people think about motoring — and the homes that support it — will evolve.

If you’re planning to sell or rent out a property, now is the time to think about:

driveway access charging installation energy efficiency smart meter or solar potential

These features can help your property stand out and maintain value.

If you’d like help positioning your home in the market — or you want to know what upgrades could increase your sale price — feel free to get in touch. I’m always happy to offer guidance.